After days of negotiations, the owners of America’s only under-construction nuclear plant agreed Wednesday to keep expanding it by adding two new reactors, a major victory for the fading industry and supporters of the zero-emissions power source.
The completion of the Georgia Vogtle plant’s new reactors, which are half finished, had been in doubt because the project is years behind schedule and billions of dollars over budget.
“We are pleased to have reached an agreement and to move forward with the construction of Vogtle Units 3 & 4, which is critical to Georgia’s energy future,” the co-owners said in a statement. “While there have been and will be challenges throughout this process, we remain committed to a constructive relationship with each other and are focused on reducing project risk and fulfilling our commitment to our member-consumers.”
Utility Southern Company and the plant’s three other owners had sought to reach a deal to limit further cost increases for the nearly $28 billion project, more than double the original projection, after blowing by a self-imposed Monday deadline to decide whether to proceed with the expansion of the Vogtle plant.
The companies said the agreement will “mitigate financial exposure.”
Southern Company’s subsidiary Georgia Power, which owns 45.7 percent of the plant — making it the largest owner — agreed to absorb a greater share of the cost of any additional overruns, according to details of the agreement filed with the Securities and Exchange Commission.
The deal also gives Georgia Power the option to buy out the other owners if there are more than $2.1 billion in future cost overruns, or it can choose to cancel the project.
Southern Company announced last month that costs for the project had increased by $2.2 billion, which prompted a vote on whether to complete the plant, including the other three other owners: Oglethorpe Power, the Municipal Electric Authority of Georgia, and Dalton Utilities.
The Trump administration has firmly backed and invested in the plant, providing $3.7 billion in loan guarantees, viewing it as central to keeping alive the promise of clean energy from nuclear power, which emits no greenhouse gases. Vogtle has received a total of $12 billion in federal loan guarantees, with the Obama administration also supporting the plant. The new reactors would be the first to be successfully built in the U.S. in more than 30 years if they are completed as expected, beginning with the first reactor in November 2021.
Southern Company has pitched Plant Vogtle since 2009 as a way to revive the U.S. nuclear industry, to supplement an aging fleet losing out to lower-cost natural gas and renewables. The owners promised that two reactors planned for the site would give the state emission-free electricity for as long as 80 years, powering 500,000 homes and businesses.
Today, 60 percent of the carbon-free energy produced in the U.S. comes from the nation’s existing 99 nuclear power plants.
But in March, Westinghouse, the lead contractor on the project that designed the reactors, went bankrupt, imperiling the future of the plant.
Cost overruns forced South Carolina last year to cancel a similar plan for two nuclear reactors in the state after Westinghouse, also the reactor’s designer for that project, went bankrupt.
Federal officials on Wednesday, in anticipation of the Vogtle decision, said a thriving nuclear power industry is crucial for the U.S. to limit carbon dioxide emissions.
“Nuclear energy is both clean and reliable,” Environmental Protection Agency Acting Administrator Andrew Wheeler said during an address recognizing National Clean Energy Week. “President Trump and his administration are committed to reviving and revitalizing nuclear energy. We’re watching what’s going on in Georgia to see how that pans out for nuclear energy.”
Neil Chatterjee, a Republican commissioner of the Federal Energy Regulatory Commission, made similar comments at the same event.
“I am worried about what even a slight uptick in the retirement of nuclear units may have on our ability to reduce global emissions,” he said.
